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Production with Two Factors and Many Goods Large Firms in a Small Open Economy

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  • Henry Thompson

Abstract

A tractable general equilibrium model of a small open economy producing many goods with two primary inputs is developed. Firms are large in that their output decisions affect their costs. One sector produces many different goods under variable costs, which arise through a link between output and the cost of the firm. Comparative static results depend on factor intensity and the degree of increasing costs. Some ambiguities arise in the comparative static adjustments associated with the sector producing the constant cost homogeneous good. [F1]

Suggested Citation

  • Henry Thompson, 1998. "Production with Two Factors and Many Goods Large Firms in a Small Open Economy," International Economic Journal, Taylor & Francis Journals, vol. 12(2), pages 107-116.
    • Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:107-116
    DOI: 10.1080/10168739800000016
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    References listed on IDEAS

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    1. Ruffin, Roy J., 1977. "A note on the Heckscher-Ohlin theorem," Journal of International Economics, Elsevier, vol. 7(4), pages 403-405, November.
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    7. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-935, October.
    8. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    9. Jota Ishikawa, 1994. "Revisiting the Stolper-Samuelson and Rybczynski Theorems with Production Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 101-111, February.
    10. Markusen, J. R. & Schweinberger, A. G., 1990. "The positive theory of production externalities under perfect competition," Journal of International Economics, Elsevier, vol. 29(1-2), pages 69-91, August.
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